Federal Spending & Revenue
The annual increase in federal spending at present is below the prevailing inflation rate.
So far this fiscal year the annual federal budget deficit is 34% lower than it was at the same point last fiscal year.
Overall the budget deficit has dropped from $412 billion in fiscal 2004 to $189 billion (annualized) at present. That’s a 54% projected decline. That’s despite the U.S.-led global war against terrorism. That’s despite Katrina and Rita. That’s despite National Guard troops deployed on the Southern border.
Although federal tax rates are much lower than they were in December 2000 federal tax receipts substantially are higher.
Flat federal spending is based upon what was done by the prior Congress. Lower federal tax rates are based upon what was done by the prior three Congresses. In addition to the business cycle the sharply-reduced federal budget deficit is based upon what was done by the prior Congress.
Employers of Illegal Immigrants
In connection with a 26-point laundry list of immigration reforms the Department of Homeland Security announced on Friday a new crackdown on employers of illegal immigrants.
Employers will be compelled to fire workers with fake Social Security numbers. Employers also will be subjected to stiffer fines. This effort will entail the operational debut of that national Tax ID verification database, about which various malcontents reflexively have been complaining.
The program will be enforced by stepped-up ICE raids at worksites. So far this calendar year there have been eight major indictments, mass arrests or group guilty pleas/convictions, in connection with worksite enforcement. There were seven major worksite operations conducted in calendar 2006, involving several thousand alien arrests, hundreds of criminal court filings, thousands of immigration court deportations, and multiple group indictments of top business executives.
For those who are curious here’s a link to the complete press release.
Lots of volatility on Wall Street this week, complete with short covering, short squeezes, then a total dearth of buyers and renewed shorting — en masse.
With any luck the Dow will fall all the way back down to 12,000 or even lower. At those levels I would be quite happy to purchase selected blue chips on the cheap.
To summarize this entry in colloquial terms:
Cause & Effect
Forbes released its annual rankings of the best states in which to conduct business.
The top-10 business states:
3. North Carolina
9. North Dakota
Eight of 10 voted for George W. Bush not once but twice. In fact, President Bush won 21 of the top-30 not once but twice.
Washington Post reported yet another decline in circulation, a decline in advertising revenue, a decline in newspaper revenue, a decline in publishing and broadcasting revenue, and a decline in total net income.
The Federal Reserve believes the economy will continue to expand at a moderate pace over the next several months and that inflation is slightly less of a risk now than it was a couple of months ago.
Cue the Imperial Theme Music
Courtesy of Reuters:
A U.S. judge on Monday reversed a jury’s verdict that Microsoft had infringed patents on MP3 music held by Alcatel-Lucent and threw out what had been a record $1.5 billion award of damages.
Same-store sales in July at major chains grew 2.9 percent, in line with projections, but lower than the 3.7% gain posted last July. For obvious reasons the media’s reporting of this item was couched in the most negative terms practicable.
America Competes Act
President Bush signed into law the America Competes Act, which is designed to help our country retain its competetive edges in key areas of science and technology.
Cause & Effect — Part II
Delphi Corp. — the former parts division of GM — reached an accord with the leaders of its industrial workers’ union to slash the hourly wages of rank-and-file workers by upwards of 50% and to reduce the number of those workers via early retirements and buyouts. The company also reached tentative accords involving wage cuts and workforce reductions with three other unions. Those agreements are key to the company emerging from bankruptcy.
Of course the very reasons why Delphi went into bankruptcy in the first instance are high labor costs and high “legacy costs,” for which the singular cause is that of a unionized workforce. Irony can be ironic, no?
President Bush indicated he’ll veto any naked attempts by the media/Democrats to hike gasoline taxes to pay for bridge infrastructure projects.
Evil Corporate America Strikes Again
Courtesy of Reuters:
Pfizer Inc. said on Monday that U.S. regulators had approved its AIDS drug, Selzentry, the first in a new class of oral HIV medicines.
Selzentry is the first drug brought to market designed to keep the HIV virus that causes AIDS from entering healthy immune cells.
* * *
In the company’s studies, about 45 percent of patients who used [the drug] and previously had tried other regimens had their HIV virus levels suppressed to undetectable amounts. The same was true for 23 percent of the study sample who received placebos.
What’s your opinion about Pfizer’s new AIDS drug, Michael Moore?
Speaking of the healthcare industry, in an 8-2 decision the U.S. Court of Appeals for the District of Columbia Circuit declined to create a new federal constitutional right — ruling instead that terminally-ill patients cannot force healthcare providers via government intervention to provide them with experimental drugs.
314,000 – 4-week avg. of initial jobless claims, August 2, 1997.
308,000 – 4-week avg. of initial jobless claims, August 4, 2007.
Yep, that’s true — fewer people today are being laid off from their jobs when compared to the same period 10 years ago. That’s despite total employment today being higher by in excess of 16 million persons.
Obviously if Lou Dobbs found out about that he’d wet his pants, froth at the mouth, scream at the top of his lungs, then he’d go utterly postal. Yeah, even moreso than usual.